SGI Realty One Real Estate Blog

Open house: How to make the most of the visit

Buying a house for whatever reason should be a fun and exciting time. Open houses are an enjoyable event. You may even visit three or four different homes in one day. There are special things to look for when going to see these houses. An open house is used to check the market and let potential buyers window-shop. There are certain criteria you have in mind when searching for the perfect home.

Take a notepad with you and make a note of the address of the homes you visit. Jot down things you like and dislike about each house. This will help you keep track of which house is which. Make note of nearby schools, the general neighborhood, how close is freeway access, where are the shopping malls, and any other information that will help you decide on your choice of home. The commute to work is a vital piece of information. Many forget to consider how far away the job is. The last thing a person wants to do is spend too much time on the road instead of with the family. When attending an open house, remember that the neighborhood surroundings are an important aspect to purchasing a house.

Check the condition of the house, the road and the yard. Is it suitable of children or pets? whatever you desire, be sure to think of everything and take plenty of notes. A polaroid camera is well worth taking. Clip instant snapshots to your notebook to help you remember specific houses. Buying a house is an important step, so make sure you know what to look for. Notice cabinets, appliances, doors and even views out of the windows. Listen to noises that could be bothersome, such as a train that passes nearby or a freeway. Make sure there is plenty of living space or room to add more if you desire. Most people forget to ensure there is enough closet and storage room. Write down vital pieces of information which should include anything that will help you with your decision.

At the open house, an owner or broker is likely to be present. If there is one in attendance, ask questions. Find out all the little secrets about the house. Granted they will not always be straightforward. Have a memo of each inquiry. Put in writing all the answers. When you make the choice on a house you can add these questions into the sales contact and re-ask the query.

Going to an open house is a time-honored tradition. Open houses are for looking and sometimes even buying. With an important and expensive decision to make, it is better to research and look at all of your options. When venturing upon an open house, understand all the choices offered. Have fun and choose the best home for you.

With the recent drop in the economy, it may seem like a useless task trying to sell your home. Yet, there are several things one can do to speed up the sale of their home. Below are a few things that will really help in getting your home noticed and sold.

Hire a Good Real Estate Agent

A good real estate agent will certainly assist in selling your home quick. Obviously, using a Realtor means that you will be paying a commission to the real estate agent when the sale is concluded. However, there's a reason that the vast majority of houses sold in the United states are done through a real estate agent. For one, a qualified agent has the contacts and experience needed to help the deal go smoothly. Above all though, your real estate agent is able to list you in the local MLS, or multiple listing service. The MLS is the best way to get your house in front of the most people...there's a reason that practically 90% of all home sales in the U.S. result from an MLS listing. However, not all Realtors are created equal...therefore, when choosing an agent, be sure to look at their references, background, and experience. And make sure your agent has understanding of your specific neighborhood and its market history.

Establish a Sensible Asking Price

Price is always important, it could make or break the sale of your home. This is one more reason why you should hire a realtor. Your realtor should do a comparative market analyses (CMA) to get an idea of the best price you can get for your house. Pricing your home too high will just slow down the process.

De-clutter

People would want to visit and live in a nice home, not a messy one. Remove clutter and tidy up. Put away things that aren't frequently used. If potential customers are coming over to check out the home, remove photos from walls and shelves. Potential buyers are not interested in your holiday photos, they are more interested in picturing themselves inside your lovely home. Make your house seem more roomy by doing away with needless furniture, clearing out cabinets, and removing items on top of tables and shelves. If you want assistance in this area you may want to consider hiring a home stager.

Fix Things

You do not always need to repair the major things (those will have to come off the asking price anyway), but certainly you should fix the small problems in the home like broken faucets or window blinds. It only takes a small amount of time and effort, but is unquestionably worthwhile. Most real estate agents have a handyman on call that can come in and quickly fix the minor problems for very little money.

Leave the House

When prospective clients will visit your house, its always best to not be there. Of course, you would like to make potential buyers see how wonderful the house is, but it might be uncomfortable for both buyer and seller. Buyers might not be able to talk to the agents about their real opinion of the real estate. Aside from that, buyers would be able to ask questions freely, if the owner is not around.

What is title insurance? - Title insurance is a policy issued by a title insurance company that provides you legal and financial protection against hidden risks unknown at the time of the property purchase. Any hidden risks (e.g., forged or missing documents, mistakes in recording legal documents, and liens for unpaid estate, inheritance, income, or gift taxes) could potentially lead to loss of title to the property and a significant financial loss.

Title insurance will pay for defending you against any lawsuits attacking the title as insured, and will either clear up title problems or pay the insured's losses. For a one-time fee, a buyer's title insurance policy remains in effect as long as the insured, or the insured's heirs, retain an interest in the property, or have any obligations under a warranty in any conveyance of it.

Why do I need title insurance? - To protect possibly the most important investment you'll ever make - the investment in real estate.

A lender will go to great lengths to minimize the risk of lending money for the purchase of real estate. First, credit is checked as an indication of the borrower's ability to repay the loan. Then, the lender seeks assurance that the quality of the title to the property to be acquired and which will be pledged as security for the loan is satisfactory.

The lender does this by obtaining a loan policy of title insurance. The loan policy protects the lender against loss due to unknown title defects and any other hidden risks. You will have to pay for the lender's policy during the close of escrow. This will be one of the conditions the lender will stipulate to give you the loan.

However, the loan policy only protects the lender's interest. It does not protect you, the buyer and borrower. That is why a real estate buyer needs a title insurance policy, which can be issued at the same time as the loan policy. In fact, most title insurance companies that also handle escrows will require the buyer to obtain an owner's policy. The buyer can go elsewhere to try to avoid obtaining an owner's policy , but it is highly inadvisable.

Without a title insurance policy, you may not be fully protected against errors in public records, hidden defects not disclosed by the public records, or mistakes in examination of the title of your new property. As a result, you may be held fully accountable for any prior liens, judgments or claims brought against your new property. However, your policy insures that if such an occasion arises, you will be defended free of charge against all covered claims and paid up to the amount of the policy to settle valid claims.

What is the risk of loss? - If the lender has title insurance protection and you, the owner, do not, what possible risk of loss exists?

As an example, let's assume real estate was purchased for $200,000. A down payment of $40,000 is made, and a lender holds a $120,000 mortgage lien on the property. The lender acquires title insurance protecting the lender's interest up to $120,000. But the purchaser's down payment of $40,000 is not covered.

What if some matter arises affecting the past ownership of the property? The title insurance company would defend and protect the interest of the lender. The purchaser, however, would have to assume the financial burden of his or her own legal defense. If the defense is not successful, the result could be a total loss of title. The title insurance company pays the lender's loss and is entitled to take an assignment of the borrower's debt. The purchaser loses the down payment, other equity in the property that may have accumulated, and the property. And the balance on the note is still due!

How can there be a problem if the title has been searched and a policy issued? - Title insurance is issued after a careful examination of copies of the public records. But even the most thorough search cannot absolutely assure that no title hazards are present, despite the knowledge and experience of professional title examiners. In addition to matters shown by public records, other title problems may exist that cannot be disclosed in a search. It's the risk of these unknown problems that necessitate title insurance.

What does title insurance protect against? - Here are just a few of the most common hidden risks that can cause loss of title or create an encumbrance on title:

· False impersonation of the true owner of the property

· Forged deeds, releases or wills

· Undisclosed or missing heirs Instruments executed under invalid or expired power of attorney

· Mistakes in recording legal documents

· Misinterpretations of wills

· Deeds by persons of unsound mind

· Deeds by minors

· Deeds by persons supposedly single, but in fact married

· Liens for unpaid estate, inheritance, income or gift taxes

· Fraud

Appraisals are an Important Part of Your Home Buying Transaction

A real estate appraisal helps to establish a property's market value–the likely sales price it would bring if offered in an open and competitive real estate market.

Your lender will require an appraisal when you ask to use a home or other real estate as security for a loan, because it wants to make sure that the property will sell for at least the amount of money it is lending.

Don't confuse a comparative market analysis, or CMA, with an appraisal. Real estate agents use CMAs to help home sellers determine a realistic asking price. Experienced agents often come very close to an appraisal price with their CMAS, but an appraiser's report is much more detailed--and is the only valuation report a bank will consider when deciding whether or not to lend the money.

About Appraisers and Appraisals

• Appraisers are licensed by individual states after completing coursework and internship hours that familiarize them with their real estate markets.
• The lender might use an appraiser on its staff, or contract with an independent appraiser. If you are allowed to choose the appraiser, and it isn't someone the lender is familiar with, the results might be subject to review before they are accepted.
• The appraiser should be an objective third party, someone who has no financial or other connection to any person involved in the transaction.
• The property being appraised is called the subject property.
• You will probably pay for the appraisal when you apply for your loan.

What You'll See on a Residential Appraisal Report

Appraisals are very detailed reports, but here are a few things they include:

• Details about the subject property, along with side-by-side comparisons of three similar properties.
• An evaluation of the overall real estate market in the area.
• Statements about issues the appraiser feels are harmful to the property's value, such as poor access to the property.
• Notations about seriously flawed characteristics, such as a crumbling foundation.
• An estimate of the average sales time for the property.
• What type of area the home is in (a development, stand alone acreage, etc.).

Residential Appraisal Methods

There are two common appraisal methods used for residential properties:

Sales Comparison Approach

The appraiser estimates a subject property's market value by comparing it to similar properties that have sold in the area. The properties used are called comparables, or comps.

No two properties are exactly alike, so the appraiser must compare the comps to the subject property, making paperwork adjustments to the comps in order to make their features more in-line with the subject property's. The result is a figure that shows what each comp would have sold for if it had the same components as the subject.

Cost Approach

The cost approach is most useful for new properties, where the costs to build are known. The appraiser estimates how much it would cost to replace the structure if it were destroyed.

So What Does the Appraisal Mean to You?

Your personal approval is accomplished early in the loan process, but final loan commitment usually hinges on a satisfactory appraisal. The bank wants to be sure its investment is covered in case you default on the loan.

If the property appraises lower than the sales price, the loan might be declined, but that isn't the only hurdle it must pass. Other facts on the appraisal can be a problem, too:

• The bank probably won't like it if the estimated time to sell the property is longer than the area average.
• If the appraiser notes that entry to the property is from a private, shared road the bank might want to see a road maintenance agreement signed by everyone who uses the road, verifying that maintenance is shared by all parties.

Those are just a few examples of negatives that could stall your purchase. The lender will study the appraisal carefully before determining whether or not the property qualifies to serve as security for your loan.

An Appraisal Isn't a Home Inspection!

Appraisers make notations about obvious problems they see, but they are not home inspectors. They do not test appliances, look at the roof, check the chimney or do any other typical home inspection tasks. Never count on an appraisal to help you determine if the home is in good condition.

If the Appraisal Comes in Low

Don't panic if the appraisal comes in low, because there are often steps you can take to make the deal work.

If the appraisal uncovers other problems, remember that most problems are correctable. Try to keep your cool and work through issues one step at a time.

Buying a Home With a View

Homes with a pleasant view of the horizon often sell at a premium above similar homes without the view. However, if a view is important to you, buy it mostly for your own pleasure and not as an investment. Though you may place a considerable dollar value on the view, future buyers may not be so like-minded. It may take you longer to find a buyer when it comes time to resell the house. Or you may end up dropping your price to more nearly match other sales prices in the neighborhood.

In short, if you are buying a house with a view, try to pay as little extra as possible. Otherwise, you might not get your money back.

Lot and Landscaping

Even though most real estate value is usually concentrated in the building, the lot is important, too. Obviously, it should be as level as possible. Assuming the property is in a typical neighborhood, the lot should be rectangular – no odd shaped lots or oddly situated lots.

Yard sizes are smaller in modern homes than in older homes, but there should still be a decently sized front and back yard. Do not buy a house where the entire back yard is taken up by a swimming pool, for example.

Do not purchase an over-landscaped property, either. You would normally pay a premium for that, which you may not be able to recover when you sell. You will get your best value if the house is moderately landscaped or under-landscaped for the area. You can always improve the landscaping during your ownership by improving the grass and adding bushes and trees. Just do not spend too much.

House Size

In each residential neighborhood, houses will vary in size and rooms, but they should not be too different. If resale value is an important consideration, you should not buy the largest model in the neighborhood. When determining market value, the homes nearest to yours are most important. If most of the nearby houses are smaller than your house, they can act as a drag on appreciation.

On the other hand, if you buy a small or medium house for the neighborhood, the larger homes can help pull up your value. This is one of those times where determining your "wants" versus your "needs" can be extremely important. Buying what you need in a more prestigious neighborhood may provide more financial reward than getting what you want in a less desirable neighborhood.

Bedrooms and Bathrooms

Three and four bedroom houses are the most popular among homebuyers, so if you can stick in that range you will have more potential buyers when it comes time to resell. Five is okay, too, as long as you do not have to pay too much extra for the additional bedroom.

There should always be at least two bathrooms in a house, preferably at least two and a half. One bathroom with a place to wash up for day-to-day visitors, one for the master bedroom, and at least one to be shared by the other bedrooms.

Closets, Garages, and Laundry

Walk-in closets are extremely desirable for the master bedroom. For the rest of the house, just be sure there is plenty of closet space. Don’t forget space for linens and towels.

Garages add to the resale value and you should always make sure to get at least a two-car garage. Lately, three-car garages have become desirable in some areas of the country.

The laundry facilities should be located somewhere convenient on the main floor of the house, but not in a place it will create an eyesore. Think about whether you want to walk up and down stairs when carrying loads of laundry.

The Kitchen

Family activity centers around the kitchen, so this is the most important room of the house. Larger kitchens are better, and they should be provided with modern appliances. Obviously, the dining room and breakfast nook should be located adjacent to the kitchen. In newer houses, the family room should also be extremely close to the kitchen.

There should be easy access to the back yard, as there will be occasions for barbecues and outdoor entertaining. In addition, it should be a short trek between the garage to the kitchen so hauling groceries in from the car does not become a horrendous chore.

Fireplaces

The only room where you absolutely have to have a fireplace is the family room. A fireplace in the living room may be nice, but you pay extra for it and will probably rarely use it. At best, it serves as a focal point of the living room, but does not add much in real value.

Swimming Pools

Swimming pools do not provide as much added value as they once did. Safety issues about families with younger children have become more publicized than in the past, so families with small children tend to avoid homes with pools. As a result, having a pool may actually reduce the number of potential homebuyers when you try to resell the home.

Buy a home with a pool for your own enjoyment, not as an investment.

Since we are on the subject of swimming pools, here is a word of advice: If you want a pool, buy a home that already has a pool. Paying a contractor to install one for you is like throwing money away. You will never get a dollar-for-dollar return on your investment.

If your house has been on the market and isn't getting the attention and offers that you expected, it may be time to reevaluate a few things. Here are several potential reasons that good houses typically don't sell well. Go through the list and see if your home fits into one of them.

Priced Above Market

The number one reason that a house doesn't sell quickly is that it's priced above its true market value. The best way to figure that out is to find out how much people have been willing to pay for similar houses in your neighborhood. Once you know that, you can logically calculate a price for your own house based on the market price for similar houses. Keep in mind, though, that any time you price your home more than 5% above the typical price in your neighborhood, you're taking a very real risk of pricing yourself out of the market.

Poor Photo

If you're not getting calls at all from people interested in seeing the house you're selling, it may be the fault of the photograph of your home in the MLS brochure or web site. While some realtors will encourage prospective buyers to take a look because 'the picture doesn't do it justice', most buyers won't even call about a house that doesn't look good in the brochure.

Invest in a professional photographer to get the best possible picture of your house. If there's a time of day that it looks its best, arrange to take the picture then, and be sure to crop the photo to show the house at its most flattering. That photo is very likely to be the first look that prospective buyers get at your house. You want it to make a great first impression.

Terrible Curb Appeal

You may be losing sales before potential buyers even set foot in the door. Take a walk across the street and look at your house from the curb. That's the first view that people get of your house as they approach it from the street. If the lawn is shaggy and overgrown, or the house is badly in need of a coat of paint, buyers will be wondering what else hasn't been taken care of over the years.

Make sure that your house looks good from the curb. Make sure that shutters are firmly attached, paint is fresh and the lawn and bushes are well-trimmed. The better your house looks on the outside, the more likely you are to get prospective buyers to step inside.

Dirty House

If the house is dirty, cluttered or smells of old tobacco smoke and pet odors, it will be difficult to find a buyer. Very few people want to buy a dirty house. Like a house that appears neglected from the outside, a house that isn't taken care of inside will make buyers wonder what they're getting themselves into. No one wants to spend their first week in a new house cleaning up after the old owners.

Clean up your act before you start showing the house. Get rid of personal belonging or stow them out of sight. De-clutter counters, tabletops and walls. The fresher and cleaner your house is, the better prospective buyers will feel about buying it.

Unbearable Odors

Odors are one of the most insidious deal killers. If you live with pet odors, cigarette smoke and mildew smells all the time, you may not notice them - but potential buyers will. Even if it's not consciously noted, a house that doesn't smell good has a subtle psychological effect that can kill a sale before it gets started. Odors have to be attacked at the source. Take down curtains and wash them with a fresh-smelling fabric softener before re-hanging. Get rid of musty smelling carpets, and stop smoking inside your house.

If you're not certain what it is about your house that's keeping it from buying, ask your realtor to get feedback from those who come to see it. Keep track of their comments to help you put your finger on just what you need to do to make your house more appealing.

Every home needs protection. At some point during the course of owning your home, you will need to replace, clean or repair appliances and other structures. A home warranty will help you to pay those costs when things break down. As a matter of fact, a good home warranty can be a new home buyer's best friend. A comprehensive plan will cover the structure of the home and appliances should something go wrong with them. This is especially good news when buying an older home or one that was not built specifically for you.

A home buyer can negotiate the purchase of a home warranty plan. Sellers may pay for the plan as a way of getting an amount closer to their asking price for the home. Or, both parties could go fifty-fifty on a policy. It often depends on what's typically done in your area. Most sellers don't want to have to deal with calls from buyers about broken appliances after the closing. They might very well pay for the plan just to avoid this. Home warranty policies can cost several hundred dollars or more, which is not all that expensive when compared to the cost of some home repairs. You might even find a warranty company when they're running a sale and get a discount on a yearly plan. Home warranties are paid a year at a time and can be renewed when they expire.

Typically, this is how a home warranty plan works when something is in need of repair: when a covered appliance stops working, the buyer calls the warranty company. They describe the trouble and the warranty company then contacts a repair person who can handle the problem. The repair person contacts the buyer to set up an appointment. The repair person will fix the problem if they can; if not, the item will be replaced according to the terms of coverage. A service fee is assessed by the repair person for the buyer to pay.

Systems that are usually covered by a general home warranty include heaters, air conditioning and heating systems, roofing, duct work, ceiling fans, electrical wiring, plumbing, refrigerators, stoves, dishwashers, garbage disposals, telephone wiring, doorbells and other items. However, anything that's included in the plan might still be denied coverage (in certain circumstances), and you'll find yourself liable for charges incurred for any services performed. If that happens, contact your real estate agent immediately and tell him or her about the entire situation. The representative for your agent will contact the warranty company to (hopefully) straighten out the problem and come to some sort of agreement.

Some instances where coverage may be denied include if the homebuyer installed an item themselves and did a poor job at it, thereby invalidating its warranty; or, if it's determined that an appliance was improperly maintained or violated a safety code. Check your coverage and upgrade for your needs if necessary. If you follow all suggested uses for the item and allow only professionals to do all installations, it's likely that you'll be well-covered when something breaks down.

Creating curb appeal is a good idea for homeowners selling their houses in today's challenging real estate market. Homes need an extra edge to stand out and get a buyer's attention, and improving your home's curb appeal is one of the most cost-effective improvements a homeowner can make. 

Real estate agents confirm that there is no bigger sales edge than a home with top-notch curb appeal. It's the first impression a home makes, so the exterior and landscaping needs to attract attention and interest. Considering that some 74 percent of buyers today preview homes on the Internet (according to the National Association of Realtors), curb appeal is even more important than ever before.

Landscaping is one of the easiest ways for homeowners to quickly increase a home's value with little cost. Even just planting colorful flowers in landscaping beds, grooming a lush lawn and adding greenery and potted plants creates a drastic transformation and higher perceived value. In one weekend, you can tackle the weeds and fertilize your lawn and flowerbeds to make beautiful enhancements that will last for months. Spectracide and Schultz, available at major retailers, offer trusted, high-quality products for every lawn care challenge with reliable results.

A recent RealEstate.com survey of 500 sellers and 100 real estate agents across the country found both groups agreed that creating curb appeal by enhancing a lawn or landscape was the top priority for getting a house ready to sell. Half of buying decisions are based on curb appeal, according to the National Association of Realtors, and it is at curbside where homeowners' efforts need to start. To get the lawn and landscape flourishing, it's important to use the appropriate products to control insects and disease, and keep the soil moist and the grass thick, dense and green. Here are a few curb appeal ideas to green up your home:

• In the summer, use a lawn fertilizer to maintain turf's healthy green color. In the late fall, use winterizer to encourage root growth, create earlier spring greening and improve the lawn's resistance to disease, weeds and pests the following year.
• Use a weed killer such as Spectracide Weed Stop plus Crabgrass Killer to remove unsightly weeds from driveways, sidewalks and flowerbeds.
• Use Spectracide Triazicide Once and Done! Insect Killer to control insects that damage summer lawns.
• Create container gardens using Schultz  Moisture Plus Potting Mix and bright flowers to add color and style to the front porch. This will help the house stand out in the crowd.
• Use Schultz Mulch with Weed Stop to provide a finished look to all of your landscape beds.

Here are a few other simple and inexpensive ideas for homeowners on how to improve the curb appeal of their home when they're trying to sell it:

• Give your home's exterior a good scrub with a power washer to remove cobwebs and dirt. Clean the windows inside and out, and remove screens to show off the windows and let light flow into the home.
• Trim trees and shrubs that overhang the house and hide it from view.
• Store items such as hoses, garden tools, children's toys and sports equipment in the garage to give the home a polished look.

With a few simple projects, you can have a beautiful lawn and distinctive curb appeal that will turn the sign in your front yard from FOR SALE to SOLD.

There seems to be a fair amount of bidding taking place in the real estate auction sections of online auction companies. Some sellers are taking bids for a down payment, with the intention of owner-financing the property after the auction closes. For some auctions, your bid becomes the first payment in a lease-option agreement. Other sellers are simply trying to sell a property outright.

It's a little frightening to think that someone would buy property sight unseen, no matter how inexpensive it is.

· Serious deed and title problems could exist (liens, foreclosure and other claims)

· The property could be totally inaccessible.

· Structures could need massive repairs.

· It might not be possible to bring utilities onto raw land and you might not even have the right to dig a well.

There are hundreds of things to consider, and if you're not familiar with the area the property is located in you won't have a feeling for the common problems that can plague properties there--so you won't know which questions to ask.

The Safety Buffer

The good news is that real estate auctions on eBay, Yahoo! and other similar online services are not legally binding. Those companies are not true auction house that are licensed or qualified to sell real estate. The service they offer is simply an interactive advertising tool, one that sellers can use to connect with potential buyers.

After bidding closes, buyers and sellers get together and attempt to work out a true real estate contract that adheres to the laws of the state where the real estate is located.

The Bottom Line

Follow the links to read each auction company's rules. Policy guidelines are sometimes buried deep in the Web site, so you must dig a little to find them.